Home Improvement Contractor - Licensed Contractors

Is it a legal requirement to have insurance when you are self employed?

I am about to sign a contract, as a self-employed contractor, and one of the point refers to me having liability insurance. Is it a legal requirement?

Public Comments

1. Maybe not but it's a usually a commercial requirement and it's prudent.
2. yes you will need it
3. er YES... if someone has an accident on a job, and you havent got ins, a broken leg will cost you many thousands.. can you afford not to have it?
4. Yes, you cannot work otherwise.
5. Well i don't suppose its legal but it is smart i mean can you afford to take time off work because of an accident? I would get insurance
6. It depends on what you're being contracted to do, surely? It may or may not be a legal requirement, but if it says it in the contract it is a contractural obligation, by accepting the contract you are agreeing to the terms and conditions.
7. I am not sure that it is a legal requirement. However every self employed contract I have been offered over the years has demanded one. No liability insurance then no contract.
8. It probably is. Most states require licensed contractors to carry both liability and workman's compensation insurance. Lapse of insurance is cause for suspension of your license. (You should know this if you are a licensed contractor.) If you are signing a contract, and you agree to that clause, then you have legally agreed to carry the insurance. Most boiler plate contracts require proof of insurance either before signing or before work begins, and further require that the insurance be kept in force throughout the term of the contract (no fair getting it one day, and cancelling the policy the next day.)
9. There is no legal requirement to have insurance if you are self employed - other than employer's liability insurance if you employ anyone (or are operating a ltd liability company - except in some circumstances). That having been said, a person entering into a contract with you may request that you have insurance so that they know that if something goes wrong then they will be reimbursed due to your negligence. If they ask for it then if you agree to the contract then you are bound to arrange insurance - you are perfectly free to try and negotiate a contract where you won't need insurance, or walk away from this one. I don't know your occupation but public liability insurance for most single-person contractors is usually pretty cheap (<£100) - unless you are using heat/ working in high-risk locations etc. If you are operating as a sub-contractor it may be a requirement of the principal contractor's public liability insurance policy that they ensure that all subcontractors have liability insurance.
10. Most states require a contractor's license, liability insurance and (if you have any employees) workers' compensation insurance.
11. It is not a legal requirement to have Public Liability - BUT it would be extremely dumb not have it though. However if anyone works for you directly, or indirectly in so far as you are legally responsible for them - then it is a legal requirement to have Employers Liability for them (and you won't get that without having PL for both you and your employee/s).